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TMI Blog2021 (9) TMI 346X X X X Extracts X X X X X X X X Extracts X X X X ..... trict Gandhinagar as a capital asset u/ s 2(14)(iii) (a) as well as u/ s 2(14)(iii) (b) of the Income Tax Act, 1961. 3.0 The learned Commissioner of Income- tax (Appeals) further erred in law and on facts in confirming the addition of Rs. 1,33,25,071/- made by the ld. A.O. as long term capital gain. 4.0 The learned Commissioner of Income- tax (Appeals) erred in law and on facts in confirming the action of ld. A. O. whereby the exemption claimed u/ s 54B has been restricted to Rs. 20,00,000/- instead of Rs. 2,11,00,000/-." 3. Briefly stated, the assessee in its return of income for A. Y. 2012-13 inter alia declared long term capital gains of Rs. 1, 33,25,071/- on sale of certain land parcels at Adalaj, Gujarat. The assessee claimed deduction under s. 54B of the Act to the extent of aforesaid long term capital gain by way of purchase of another land at Khoraj for a consideration of Rs. 2,11,00,000/-. Consequently, the taxable capital gain was shown at Nil in the return of income. While framing the assessment under s. 143(3) of the Act, the AO held that the capital gains on sale of agricultural land arising to the assessee falls within the definition of capital asset under s. 2(1 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... capital gains under s. 54B of the Act in the event of the capital gain arising on sale of Adalaj land is found chargeable to tax. 10. The key points raised on behalf of the assessee to defend the stance of the assessee that the agricultural land sold giving rise to capital gains does not fall within the purview of definition of 'capital asset' and consequently not chargeable capital gain tax are listed hereunder: (a) It is admitted fact that the impugned land at Survey No. 361/lm 362 Block No. 474, Village Adalaj (sold on 17. 06. 2011) was an 'agriculture land' because the above fact is neither disputed by the Id. A. O, nor by the ld. CIT(A). It is also admitted that Adalaj is a village administered by the/ Gram Panchayat and not by any ' municipality' etc. (b) The final figures of Census 2011 were not published before 1st April, 2011. In view of the above, the population of village Adalaj as per data last published as per the Census of 2001 were less than 10, 000. Moreover, Adalaj is a village not having 'municipality' or ' municipal corporation' and therefore the sub-clause (a) of Section 2(14)(iii) would not be applicable in view of the decisions in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... icipal corporation' has to be seen as on the date of Notification No. [ SO 9447] [ File No. l 64/ 3/ 87 - ITA. l] dated 06. 01. 1994 i. e. 06. 01. 1994 as per Explanation (2) to the above Notification. Moreover, the following decisions also support the above view:- (a) Pr CIT v/ s Khetilal Sharma (HUF) 2017 (11) TMI 1651 - Raj HC (b) ITO v/ s Akash Deep Farms P. Ltd 2016 (9) TMI 918- ITAT AHD (f) In view of the above propositions, it is evident that the impugned land is not a 'capital asset' being not a land which falls in either sub- clause (a) or (b) of section 2(14)(iii) of the Income Tax Act, 1961. (g) Moreover, in the case of one of the co-owners Shri Gabhaji Somaji Thakur (l / 3r d share), the ld. CIT(A), Gandhinagar vide his order dated 18. 01. 2019 has held that the impugned land is not a 'capital asset' within meaning of section 2(14) of the Act. 11. We straightway notice that the CIT(A), Gandhinagar in the case of other co-owner Shri Gabhaji Somaji Thakur (l/ 3rd share), has given a reasoned order and held that impugned land is not a capital asset within the meaning of Section 2(14) of the Act and consequently, not susceptible to capital gain ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... - Held, it was in record that land sold by assessee also did not fall within such distance of not being more than 8 kms from local limit of any municipality or cantonment rather lands covered under HADA were more than 21 Kms from municipal areas i, e. GHMC of Hyderabad- In case of T. Urmila, in similar issue Tribunal held that HADA was not local body and lands within HADA was not capital asset u/ s 2(14)(iii)- In assessee' s case, land sold by assessee was within HADA and therefore, character of land was agricultural land- ITAT did not see any reason to interfere with order of CIT (A)- Revenue' s Appeal dismissed. It is observed that the Notification No So: 9447 dated 06/ 01/ 1994 issued by the Central Government specifically provides for measuring the distance of particular land from Municipal Corporation Limit and accordingly it is held that the reliance of AO on the certificate of AUDA is justified. Further, it is also observed that distance of particular land is to be ' measured from the date of Notification No: 9447 dated 06/ 01 / 1994 and even considering such fact that distance between Gandhinagar Municipal Corporation to Adalaj is beyond 4 kms and accordingl ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... al Corporation. From the above, it can be concluded that the land in question is situated 5. 017 kms from the Gandhinagar Municipality limit and population of Adalaj is 9776 people as per last census conducted in 2001, hence, gain on sale of land is not liable for taxation u/ s 2 (14) of the Act. Therefore, it is held that the AO is not justified in treating the gain on sale of land as taxable long term capital gain. The land is agriculture land within the definition of section 2(14) of the Act and therefore, the addition made by the AO of Rs. 1, 33, 33, 645/- is directed to be deleted." Needless to say, the stance of the revenue has to be consistent in the same lis. The order of the CIT(A) in the case of other co-owner of the impugned land Shri Gabhaji Somaji Thakur in not under challenge. Therefore, the view taken in the case of other co-owner has attained finality and ought to have been followed as a matter of judicial discipline. The Revenue cannot be permitted to take different stand in two different cases emanating from same set of facts. The case of the assessee for exclusion of agricultural land from the definition of 'capital asset' placed in identical factual matrix th ..... X X X X Extracts X X X X X X X X Extracts X X X X
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